Grappling with student loan costs

CITY OF NEWBURGH — Rep. Sean Patrick Maloney says it's wrong to ask college students to pay 6.8 interest rates on their federally guaranteed student loans.

BY MICHAEL RANDALL

CITY OF NEWBURGH — Rep. Sean Patrick Maloney says it's wrong to ask college students to pay 6.8 interest rates on their federally guaranteed student loans.

Yet that is what happened when a deadline passed July 1 with no congressional action to keep the rate on Stafford loans at the old 3.4 percent level.

"Some in Congress want to balance the budget on the backs of college kids," Maloney said.

The congressman made his remarks after touring the Newburgh campus of SUNY Orange.

The higher rates only apply to new loans approved on or after July 1, but even students who already have loans are concerned.

Ian Ceccarelli of Warwick, a student at George Washington University who also interned for Maloney earlier this year, said, "I'm at a loss as to why Congress would do this. That makes me frustrated."

Ceccarelli, who joined Maloney for his news conference, said while the higher rate won't apply to him unless he needs to take out an additional loan, "I feel horrible for everyone coming into the (loan) market behind me."

That includes students like Shannon Lynch, who'll be a Warwick Valley High School senior this fall and hopes to also attend George Washington University. He, too, criticized the higher interest rates at the news conference.

Maloney said the first thing Congress must do is pass the Student Loan Relief Act of 2013, of which he is a co-sponsor. That bill would extend the 3.4 percent interest rate for two more years.

Maloney's also co-sponsoring the Truth in Tuition Act, which would require colleges and universities to provide incoming students with non-binding estimates of their education costs, including tuition and fees.

Maloney said the average college student these days faces about $27,000 in repayment costs, and the higher interest rate will add about $1,000 to that burden.

"Kids are particularly vulnerable," he said. "This is their first experience with these kinds of decisions."